During the post World War II era, oil prices in the United States have averaged $23.57 per barrel, which is already adjusted for inflation to 2006 dollars. Without price controls, the U.S oil price would have been over $25.56. During the same post war period, the average price for domestic and adjusted world price of crude oil was $18.43 in 2006 prices. This exactly proves that only 50% of the time from 1947 to 2006 have oil prices exceeded the $18.43 per barrel mark. It was only then in March 28, 2000 when they accepted the $22-$28 price band for OPEC's supply of oil, did oil prices exceed the $23.00 per barrel in response to the ongoing conflict in the Middle East. With limited supply of crude oil, OPEC abandoned its price band and for almost 3 years, OPEC was in no position to stem a surge in oil prices which was similar to that of the late 1970's.
If we look at the statistics in a long term view, the oil price is practically much the same. Since 1869, US crude oil prices adjusted for inflation have averaged, $20.71 p
Oil today represents 2% of global GDP, not the 8% represented in 1973. So what does oil price history teaches us? Greater oil prices give people an incentive to make more effective use of oil and for the global economy to move toward more services and information technology and off from manufacturing.
